Month-End Close Software That Cuts Closing Time in Half

The month-end close is critical for the organization, especially the accounting team. With the collaboration of other departments, the finance team documents every financial transaction. It analyzes the journal entries, balance sheets, cash flow statements, income statements, and bank statements to ensure they reflect the company's financial statements.

The month-end close process summarizes the monthly financial records for financial reporting, performance evaluation, and decision-making by the company's stakeholders. Due to its significance, the process should be accurate and within the set deadline.

With the increase in technological development, there have been many month-end close software products in the accounting industry, and clients might not know which option is the best, especially when it comes to reducing the month-end close period.

This article will analyze challenges presented by the traditional month-end close and what to look for in month-end close software that will reduce the close accounting period by half.

Before that, let us analyze how long the period should take, how to cut the process in half, how key features can save time during the month-end close process, and what the organization can do beyond software expectations.

Challenges Presented by the Traditional Month-End Close Process

In the past, the month-end close process relied on traditional manual processes involving manual data entry and simplified accounting reporting models such as Excel. Let us look into the challenges associated with this model.

• Manual processes were prone to delays due to evaluating vast data sets.
• Using Excel to evaluate these repetitive tasks is tedious and susceptible to manual errors.
• The manual tasks also wasted valuable time the accounting team could have utilized in other financial processes.
• Audit trail gaps were witnessed as tracking and evaluating the financial spreadsheets' errors was difficult.
• The process did not encourage collaboration within the organization since there were dedicated tools to facilitate communication and cooperation.
• The lack of automation eliminated the use of real-time data to facilitate an early month-end close.

How Long Should a Month-End Close Take?

Since organizations ' sizes, budget allocations, and operations complexity vary, there is no set time to determine how long the month-end close process should take.

However, it is recommended that the process take less time so that by the end of the month, the company has already completed and verified its close process.

How to Cut Your Monthly Close Time in Half

Although traditional month-end close processes can be efficient for small companies, using month-end close software is the best option for reducing the process by half.

Accounting software offers a solution to the manual processes associated with the month-end close process. Their introduction has solved many accounting worries, such as improving internal controls, meeting tight deadlines, and offering timely valuable insights on the company's financial health.

To cut the month-end close time by half, an organization's accounting team needs to incorporate two options:

• A change in their accounting practices.
• The best accounting software, based on their needs, software features, and budget.

Key Features that Cut Month-End Closing Time by Half

Automated Reconciliation

Reconciling bank statements, credit card statements, and other financial records to match existing financial statements can be a long and tedious task that takes a lot of time and might delay other business processes.

However, accounting software reduces the time-consuming reconciliation tasks since automation features categorize these details and present the accounting team with completed records.

Workflow Automation

accounting software allows you to create and automate standardized workflows for the month-end close. The standardized workflow will ensure consistency in completing processes associated with the closing process.

The accounting staff and members of other departments in the company will not waste time, and the reports will be completed promptly.

Centralized Task Management

Month-end close software provides a centralized platform for managing all the tasks involved in the close process. With accounting software, business owners can create a month-end close checklist where every member can complete their assigned tasks on time for financial closing.

Real-time Dashboards and Reporting

Accounting software has dashboards that provide real-time visibility into the month-end close's progress, highlighting bottlenecks or delays.

In addition to the dashboards, the software can generate financial statements that can aid in making informed decisions since they offer valuable insights into the month-end closing process.

Secure Document Storage

The accounting department wastes time tracking financial records for the monthly closing process. However, with accounting software, all documents are stored in a centralized cloud backup system that facilitates multiple users' access to data at any time.

This eliminates the tedious and error-prone process of manually reviewing financial statements and records for different organizational business units.

Collaborative Tools

Built-in collaboration tools facilitate communication and information sharing between team members, improving teamwork and reducing the risk of miscommunication.

Automated Financial Entry Templates

Nothing beats tight deadlines. Automated templates allow finance professionals to use algorithms to direct the entry of financial records, such as recurring journal entries on vendor payments, depreciation, and accruals.

Templates not only cut the time of the monthly closing process by half but also reduce the potential issues that might result from errors in financial reporting.

Integration with Accounting Software

Accounting software offers seamless integration with existing accounting software, ensuring data consistency and eliminating the need for manual data transfers. Thus, accounting professionals do not have to wait for the approval process to utilize generated data, which saves time for the financial close.

Exception Reporting

Traditional accounting systems required the routine task of manually reviewing every transaction, which was time-consuming.

However, various accounting software highlights exceptions and potential issues, allowing accountants to focus their attention on the most critical areas.

How Month-end Close Software Reduces Time by Half

Improved Efficiency

Due to software tools such as centralized document storage, automated tools, and streamlined workflow processes, the finance department does not face time constraints when generating financial reports and reconciling them for the monthly closing.

Early Error Detection

Business transactions face many errors, especially if the initial reporting stages cannot be tracked or verified. However, accounting software has automated error detection and exception reporting to help identify and correct errors early in the process before the month-end closing.

Reduced Manual Effort

Manually undertaking accounting processes such as bank reconciliation processing, data entry and confirmation, and generating financial reports takes a lot of time.

Replacing these manual efforts with automation helps reduce the month-end closing time by more than half, ensuring the accounting team has spare time to conduct other activities.

Faster Approvals and Reviews

The late transmission of transactional reports needs to be eliminated to speed up review and approval workflows. However, with real-time dashboards and automated reporting, the sharing of accounting records is fast and reliable, facilitating speedier review and approval of financial data for the month-end closing process.

Enhanced Collaboration

Effective communication channels enable fast and reliable communication between department heads and strategic partners. This, in turn, allows for fast and informed decisions related to the month-end closing process.

So, which is the right software?

One cannot pinpoint a particular software that is best for the month-end close process. However, a business owner can consider several factors to determine what best suits their organization. These factors are elaborated below.

Selecting the Best Month-End Close Software

Each business operation or project has needs that determine its accounting software selection.

Large Corporations

A large business operation most probably deals with complex transactions and massive data volumes requiring reliable software to handle accounting needs.

Enterprise performance management (EPM) suites are often preferred accounting software. These suites offer financial consolidation, planning, budgeting, forecasting, reporting, and analysis tools.

The other options are financial consolidation and close management software. These user interfaces specialize in the financial consolidation and close process and offer advanced features for managing complex consolidations, intercompany transactions, and reporting.

ERP Systems are automated applications designed for robust financial management modules that are part of the month-end process.

Small Corporations

Small corporations handle smaller data volumes, making their financial reporting less complex than that of big organizations. Therefore, a business owner must consider a simple yet effective software application.

A cloud-based accounting software that ensures accessibility, affordability, and ease of use. Examples of vendors offering cloud-based software include QuickBooks Online, Xero, Zoho Books, and FreshBooks.

Desktop accounting software, such as QuickBooks, is installed directly on a computer and may be suitable for businesses with minimal internet access.

Hybrid solutions are also an option for small organizations. They combine the traditional accounting system, Excel, and accounting software. However, Excel is maintained for specialized close tasks that do not take valuable time.

Several factors need to be considered when selecting accounting software to reduce the Month-end close time by half.

These factors comprise:

• Accounting software features: Any organization should prioritize the features that it needs. A large organization will go for accounting software with many features. In contrast, a small organization will prefer software with a basic option that handles repetitive tasks like reconciliations, workflow management, and reporting capabilities.
• The size: Smaller businesses may opt for more affordable, cloud-based solutions, while larger enterprises may require more robust and feature-rich platforms
• Budget: An organization with a big budget would prefer a software solution with more features, as reflected by its monthly subscription. On the other hand, a smaller business will look for an affordable solution that meets its needs.
• User-friendliness: Choose an intuitive software that is easy to use and does not have a steep learning curve. This will have a good reception among the accounting team.
• Integration capabilities: When selecting, ensure the software integrates seamlessly with your existing accounting software and other relevant systems.

Best Practices for Efficient Close

Having the best software for your needs is not the only way an organization can reduce its month-end close process by half. It needs to be accompanied by best practices. These practices entail:

• Having open communication channels across all departments within the organization. This ensures easy collaboration and eliminates misunderstanding.
• Accounts should be reconciled regularly, not just when the month ends. With accounting software that offers real-time data reports, daily reconciliations are possible.
• Standardized procedures related to the month-end close process should be established and well-documented for future reference.
• Aim to improve. Conduct regular reviews and optimize the close process to identify areas for improvement.

How Xenett Facilitates a Fast Month-End Close

Xenett is a cloud-based accounting software suitable for small to medium-sized businesses due to its affordability and robust features that cater to most of their accounting processes. Most importantly, Xenett can cut the month-end close process by half. The features that make Xenett one of the best options in the market are:

Centralized file management: Xenett users can store and access accounting reports from one centralized location. Since it is cloud-based, it can be accessed from anywhere as long as one has authorization.

This ensures that members of the accounting team have real-time data to conduct the month-end close process and make informed decisions about it.

Budget-friendly: Small and medium-sized businesses with limited budgets prefer Xenett, which offers a range of payment plans that can fit a variety of needs associated with the month-end close process.

Scalability: Xenett can match growing business needs, facilitating scalability probabilities for the company's future operations.

User-friendliness: Xenett is easy to understand and use for accountants, as its learning scale is not steep. Certain features, like the client portal, facilitate communication and ease of use by clients.

Facilitates collaboration: For a quick month-end close process, collaboration between departments is essential. It ensures that everyone is on par with accounting operations and the month-end close checklist.

Key features: Xenett features such as automation, dashboards, Link Workpapers, and auto-review help facilitate collaboration between the accounting team's various stakeholders.

This ensures that the month-end close process is seamless, reducing time spent significantly.

Integrates with other software and accounting tools: Integration with other accounting tools and existing systems is essential to ensure that the month-end process is not delayed.

Inflexible software that limits integration leads to operations delays and budget constraints. However, Xenett integrates with other software, such as QuickBooks and Xero. Additionally, it integrates with existing accounting tools, ensuring that the month-end close is fast and efficient.

Conclusion

Month-end close software offers a compelling solution for businesses looking to significantly reduce their closing time and improve the accuracy of their financial reporting.

However, several factors determine the best software for the company to use that cuts the month-end close period by half. These factors include the size and complexity of operations, budget allocations, user-friendliness, integration capabilities, and features presented by the software.

Additionally, having the best software should be accompanied by efficient company practices that also seek to facilitate a fast month-end closing. Such practices comprise regular reconciling, improvement, and optimization of accounting practices, standardized procedures, and open communication channels that enhance collaborations.

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